Broker tips: Unilever, SABMiller, BAE Systems

LONDON (ShareCast) - Shore Capital has reiterated a 'buy' recommendation on Unilever (NYSE: UL - news) after the consumer products giant beat forecasts with its first-quarter update, with the broker labelling it as a long-term winner in the FMCG sector. "Unilever's valuation sits comfortably within a basket of its global FMCG peers, and we continue to view the group as a longer-term winner with its leading emerging market exposure (which remains a major virtue despite short-term constraints), strong balance sheet and ongoing margin potential from 'maxing the mix', the focus on home care returns and ongoing operational leverage," Shirley said.

SABMiller (Xetra: BRW1.DE - news) impressed the market with a pick-up in sales growth in its fourth quarter, prompting Numis Securities to maintain a 'buy' rating on the brewing titan.

However, the broker said its positive stance on the stock is "predicated on the view that SABMiller is an industry consolidation target".

Shares (Berlin: DI6.BE - news) in aerospace and defence group BAE Systems (LSE: BA.L - news) were trading lower on Thursday after the stock went ex-dividend, though UBS (NYSEArca: FBGX - news) was providing further downwards pressure after cutting its rating from 'buy' to 'neutral'.

"As the share price approaches our price target of 540p, we do not believe there is sufficient upside potential to maintain the 'buy' rating and are downgrading to 'neutral' and removing from the UBS Key Call list," UBS said. The bank also said that sentiment could also potentially be hurt by a less-than-expected increase in the US budget and fears over budget cuts in the UK.